Africa to launch first continental ratings agency in October as global firms race for local expertise
Africa’s first continental credit rating agency will launch in Mauritius on October 6, marking a major step in the continent’s push to reshape how global investors assess its sovereigns and companies and reduce reliance on international rating firms.
Africa’s first continental credit rating agency will launch in Mauritius on October 6, marking a major step in the continent’s push to reshape how global investors assess its sovereigns and companies and reduce reliance on international rating firms.
The African Credit Rating Agency (AfCRA) is being established as an independent, private sector-led institution that will provide sovereign and corporate credit ratings based on African market realities while operating on a commercial basis.
Speaking to CNBC Africa on Wednesday, Misheck Mutize, lead expert at the African Peer Review Mechanism (APRM), said preparations for AfCRA have progressed faster than initially expected following discussions at the recent African Union Specialised Technical Committee meeting.
“It means a new dimension has come. We are seeing more confidence in Africa because the investors backing this initiative are from the private sector,” Mutize said.
He said the agency will operate without government shareholding, reinforcing its independence and commercial orientation.
Mutize added that the recent consolidation within the global ratings industry reinforces the case African institutions have long made for greater local expertise in credit assessments.
Referring to S&P Global’s acquisition of Agusto & Co., which operates in Nigeria, Kenya, Rwanda and Ghana, he said the deal reflects growing recognition that understanding African markets requires analysts with closer knowledge of local economies, institutions and issuers.
“We seem to be vindicated that we were raising legitimate concerns,” Mutize said, adding that African institutions have backed their criticism of sovereign ratings with empirical research.
He stressed that AfCRA is not being established to award more favourable ratings to African governments or companies, but to improve the quality, accuracy and contextual relevance of credit assessments.
“The objective is not to inflate ratings,” he said. “It is to ensure ratings are informed by a deeper understanding of domestic political, economic and institutional realities.”
The launch comes as global rating agencies deepen their presence on the continent through acquisitions of local firms, underscoring the growing importance of African expertise in assessing credit risk. S&P Global announced the acquisition of Nigeria’s Agusto & Co. on Tuesdat, while Moody’s has expanded its African footprint through acquisitions of GCR Ratings, West Africa Rating Agency (WARA) and Egypt’s Middle East Ratings and Investors Service (MERIS).
For years, African governments, policymakers and multilateral institutions have argued that international rating agencies often overstate the continent’s risks, leading to higher borrowing costs and limiting access to international capital markets. Global agencies have consistently rejected allegations of bias, saying their methodologies are applied consistently across countries.
The agency’s launch will be closely watched by investors, governments and development finance institutions, as sovereign credit ratings influence access to international capital markets, Eurobond pricing and borrowing costs.
If successful, AfCRA could become a key pillar of Africa’s financial architecture by providing an additional source of independent credit analysis while supporting the development of domestic debt and capital markets.
The initiative has received growing political backing across the continent. In a Financial Times opinion article published in February, Nigerian President Bola Tinubu renewed calls for the continent to establish its own continental credit rating agency, arguing that the continent continues to pay an unjustifiably high premium to access international capital markets.
Tinubu said the dominant global rating agencies place excessive weight on subjective assessments of political and institutional risks while maintaining only a limited operational presence across Africa. He noted that only three African countries currently hold investment-grade sovereign ratings despite the International Monetary Fund projecting Africa to be the world’s fastest-growing region.
He also cited a 2023 United Nations Development Programme report estimating that rating inefficiencies cost African economies about $75 billion annually through higher borrowing costs and missed financing opportunities.
Tinubu argued that an African-owned credit rating agency would provide assessments that better reflect the continent’s economic fundamentals while helping address what policymakers have long described as the “Africa premium.”
